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Tag Archives | money laundering

Western Union is befuddled by the “complex nature” of complying with money laundering controls. Apparently it’s just darned hard to figure out how to not launder drug cartel money. They paid $94 million in fines in 2010, promised to sin no more, and to clean up their act. They were supposed to be in full compliance by 2013, but weren’t. The deadline has been extended to 2017, and they may pay additional fines. I guess that’s just the cost of doing business, isn’t it?

The revised settlement also raises the prospect of new financial sanctions on Western Union in the event its compliance program doesn’t pass muster with the independent monitor. Among other potential fines, the state could require the firm to pay $50 million plus $1 million for each so-called primary recommendation or group of primary recommendations it doesn’t implement successfully, the document said. There are now 73 primary recommendations and groups of primary recommendations overall.

This sobering report from Chatham House details the various ways DTOs (Drug Trafficking Organizations) launder money, manipulate stock prices, and turn dirty money into minty fresh clean money. Drug cartels have multitudes of businesses, some of which may have legitimate income. Invoices and contracts are created, money is received. However, the services provided are fictitious. Some companies may be public. thus, they buy the stock or options, then pump money into the company. This boosts the stock price, then they sell for a profit.

By now, DTOs no doubt control banks and brokerages, which makes money laundering all the more easier.

In the first route, the laundering company (LC) pays to the return company (RC), based on a legitimate service agreement, a portion of the dirty money received from the DTO. As mentioned before, this agreement may involve a variety of services such as public relations, marketing and tax advice. The key point is that there is a lawful agreement to back up the invoice to be issued by the return company to the laundering company to justify the payment of those funds. This is clearly a legitimate operation that does not raise any suspicion by the authorities.

The second route is somewhat more elaborate and involves transactions through the stock exchange. The process has two stages. In the first stage the investment company (IC) acquires (through a private or public transaction) shares or options to purchase shares of the laundering company (LC) at market prices. The dirty money introduced into the laundering company as fictitious sales, having no associated product or service cost, increases the profitability of the laundering company, hence increasing the market value of the laundering company shares. In a second stage, the investment company sells shares of the laundering company or exercises the options and generates a capital gain from the purchase and sale of the stock and/or options.

Saddle River Valley Bank, which has since been absorbed by another bank, will pay $8.2 million in fines for money laundering violations and of course no one got indicted because the Obama Administration doesn’t indict banksters. Rule of Law is, of course, just for the little people.

“It’s pretty remarkable that a small community bank in suburban New Jersey was attracting more than a billion dollars in transactions with customers in Mexico and the Dominican Republic, and nobody thought it was too good to be true,” FinCEN Director Jennifer Shasky Calvery said in a statement.

It’s also pretty remarkable the extent to which our banking system is corrupt. The federal government does little about it except collect fines. This is essentially the same thing as protection money. Banks pay fines, no one goes to prison, the US govt makes a few pretend changes, and the money laundering continues.

In a quaintly worded headline, The Telegraph says UK banks are “vulnerable” to money laundering. In my view, the banks are active, knowing participants. They need that dirty money so they can pretend to still be solvent. Some of them no doubt are seriously mobbed up.

Britain’s major banks remain vulnerable to being used to fund terrorism and money laundering by criminal gangs, despite being fined billions of pounds in recent years for failing to crackdown on illegal financing.

And despite all the pious bankster bleating about how they value a free market and competition, in truth, they detest it.

A priest was arrested last week in a scheme to bring $26 million into Italy illegally for a financier. The “priest” has a very odd background indeed. It’s all financial. He became a priest at 35 and seems little interested in doing the work of the Lord, preferring money-laundering apparently. Corruption at Vatican Bank has been going on for decades and at least one person, Banco Ambrosiano Chairman Roberto Calvi was murdered because of it.

Of course, the question now is just how honest the new pope Francis was when he vowed to simplify and reform any shady dealings in the Vatican: because not even he likely has any idea just how deep this particular rabbit hole goes… or what will be revealed when the latest criminal thriller involving a priest, a banker and a spook reaches its climax.

I believe that Pope Benedict also tried to reform the Vatican Bank, or pretended to, at least. Perhaps the Vatican Bank is so mobbed up that firing everyone in charge of it wouldn’t work because of what would invariably come to light, things the Catholic Church cannot allow to be made public because of the damage it would do to them.

All my life I kept trying to go up in society. Where everything higher up was legal. But the higher I go, the crookeder it becomes.” – Michael Corleone in Godfather 3, which was about Vatican Bank corruption